Commercial natural gas in Houston

Texas has a competitive natural gas market for business customers, but it is structured differently from electricity and it is far less advertised. Most restaurant, hotel and manufacturing operators in Houston have never been asked whether they would like to shop their gas supply.

How gas choice actually works

The physical gas is delivered by the local distribution company — CenterPoint Energy across most of the Houston area — which owns the pipes and the meter and charges a regulated delivery rate. That much mirrors electricity exactly.

Where it differs is eligibility. Gas supply choice runs through the utility's transportation tariff, which generally requires a certain level of consumption. Businesses above the threshold can buy the molecule from a competitive supplier and pay the LDC to transport it. Businesses below it typically remain on the utility's bundled sales service, where supply and delivery come together and there is nothing to shop.

So the first question on any gas enquiry is whether your meter qualifies. We check the bill and tell you. If it does not, that is the answer and there is no proposal to make.

How gas is priced

Commercial gas is typically priced against a published benchmark — most often a NYMEX Henry Hub contract — plus a basis differential reflecting the price difference between that benchmark and the delivery point serving your area, plus the supplier's margin.

That structure is more transparent than a retail electricity matrix rate, because each component is visible and can be discussed. It also means the timing of when you lock matters a great deal, since the benchmark moves continuously.

Fixed, index and hybrid, again

The same three structures apply as on the electricity side. A fixed price locks your cost per MMBtu for the term. An index price floats with the benchmark. A hybrid fixes a portion of expected volume and floats the rest.

The judgement is also the same: fixed for businesses that need budget certainty and have nobody watching the market, index or hybrid for those with the tolerance and the attention. Gas is somewhat more volatile than electricity in cold months, which sharpens rather than changes the argument. The fuller version of that trade-off.

Winter is the wrong time to start

Gas demand and forward prices peak in winter. A business that reacts to its first alarming January bill by contracting in February is buying at close to the worst moment of the year.

Contracting in the shoulder seasons — spring or early autumn — is generally better, and it is available to any business that knows its contract end date far enough ahead to plan for it. That is the whole argument for looking at your gas position before you need to.

Who this matters most for in Houston

• Restaurants and commercial kitchens — ranges, fryers, ovens and water heating.
• Hotels — commercial laundry, kitchens and domestic hot water at scale.
• Manufacturing and fabrication — process heat, furnaces, ovens and boilers.
• Multi-family properties — central boilers and shared hot water systems.
• Schools, churches and larger community buildings — heating and kitchen load.

If your business is on that list and you have never seen a gas quote from anyone other than the utility, it is worth ten minutes.